Your social media could affect your insurance rates
Fact-checked with HomeInsurance.com
From a young age, we’re taught that sharing is caring. But oversharing can land us in trouble—especially when it comes to social media.
Data shows that roughly 3.5 billion people are active on social media every day. And it’s not just young people who are dominating platforms like Facebook and Instagram. Roughly 48% of baby boomers are active social media users.
Social media is relatively harmless if you’re using it to share pictures of your cat or catch up with friends from high school. But when you’re advertising your life to your entire network, it’s easy to overshare, which can impact more than just your social standing.
You might be surprised to learn that insurance companies can check your profile when you apply for a new policy; what you’re sharing publicly has the ability to impact your rate.
What factors affect insurance rates?
When you apply for insurance, there are a variety of standard factors that impact your rate. The specific factors depend on what type of insurance you’re getting, but here are some of the common criteria:
- Where you live
- Your age
- Your gender
- Your marital status
- Your credit score
- Your claims history
Social media is typically not a major factor when it comes to your insurance rate. But some insurance companies will review your profiles before they approve you for coverage.
Is it legal for insurers to use social media?
You’re probably wondering if it’s legal for insurance companies to review your social media profiles. The answer is yes—insurance companies are legally allowed to look at your social media when investigating a claim.
When you sign up for a social media account, you agree to the websites’ terms & conditions — if material is publicly posted online — especially incriminating information. That means law enforcement and investigators can legally use that information against you.
Due to clauses of implied consent, you’ve likely agreed to publicly share information when using social media websites. Some attorneys and investigators claim mining social media websites is no different than video surveillance, which is permissible to use in a court room.
However, there are some legal boundaries. For example, a claims adjuster or investigator would be crossing the line if they tried to send you a friend request. By doing so, they’d be violating claimants and defendants that likely have legal representation, which is illegal. They’re not allowed to contact the claimants in such scenarios. After claims are filed, there’s only so far they can go before it’s considered entrapment.
Sometimes, however, what people share via social media stops things from even getting that far. Consider the case of Jacob Cox-Brown from Astoria, Oregon. In 2013, police were investigating who may have side swiped two cars during the night. It didn’t take long to figure it out. A message was sent to an officer with Cox-Brown’s status update: ‘Drivin drunk… classic but to whoever’s vehicle I hit I am sorry. :P” After police arrived at his house and matched the damage to his car, Cox-Brown was arrested.
Cox-Brown now claims it was all ‘a big joke.’ To insurance companies though, this type of situation is no laughing matter. Had Cox-Brown not given himself away, he could have easily submitted a hit and run claim with his insurance company and possibly received benefits – which would have been a fraudulent claim.
The future of social media and insurance
Whether you like it or not, technology has allowed companies to track your behaviors online. And the things you share with the digital world say a lot about who you are. Insurance companies are taking advantage of that to assess the risk of insurance applicants before they agree to cover them. For instance, underwriters will look at your profile, as a whole, to get an idea of your lifestyle and habits.
It’s unlikely that you could be denied an insurance policy solely due to social media accounts, but your posts could have an impact on your rate.
Darren Black, head of home insurance for Confused.com, a UK insurance website, says, “I wouldn’t be surprised if, as social media grows in popularity and more location-based applications come to fore, insurance providers consider these in their pricing of an individual’s risk.”
In addition to higher premiums, your social media posts could lead to denied claims. In Canada, 29 year old Natalie Blanchard was denied health benefits due to her Facebook posts. She was on long term sick leave from her company due to major depression when her benefits were abruptly cut off. She called the insurer, Manulife, to question the stop payment. The insurance company informed her that since she had recently posted pictures of herself seemingly having good times at the bar, and sunning on the beach, she evidently wasn’t depressed. Blanchard argued that she was going out on doctor’s orders, in an attempt to “forget her problems.”
It’s also important to remember that posts you’re tagged in are likely visible to insurance companies. Joel Winston, Vice President of Consumer Advocacy at Annual Medical Report, states, “Somebody might post a picture of you diving underwater and tag it to you on Facebook, and so suddenly your insurance company knows what you’ve been up to, and it isn’t even something that you disclosed,” Winston points out.
What insurance companies and underwriters want to know
Even though insurance companies might be looking at your profiles, you don’t need to start deleting your accounts.
Winston says although insurers may note “the groups you’re involved in, the commentary you write on Facebook, the stuff you post on Instagram,” the average person probably doesn’t have a lot to worry about.
He states, “If you have a low-value insurance policy, it won’t come up, but if it’s a serious policy that could bring in big numbers, they’ll want more background on you.”
But if you’re applying for any type of insurance policy, it’s a good idea to look at your recent social media activity, and delete anything that could be a red flag. Whether you’re attempting to buy a million dollar life insurance policy or liability-only auto insurance, here are a few examples of things insurers will look for on your social media profiles.
Most types of insurance require you to disclose your marital status. Single people tend to pay slightly more for insurance than married people do. Underwriters may check your profiles to ensure you’re telling the truth when it comes to your relationship status.
Bad habits, your medical history, & your possible medical future
When you’re applying for life or health insurance, underwriters will want to know more about your medical history. Through your social media profiles, underwriters can look for high risk behavior, like pictures of you smoking or drinking.
If you check ‘no’ on the application where it says “are you a smoker?” and an underwriter finds a picture of you with a cigarette in your hand, you could be in trouble. Health insurers may deny benefits completely, deny claims, or even cancel coverage mid-policy if you lie about your medical history.
Information about your family
Family details can also be validated using your social media profiles. For example, if you posted on Facebook about your mother getting diagnosed with breast cancer, the insurance company can assume that you’re at a higher risk of the disease because of your family history.
Homeowners insurance companies are interested in social media for a variety of reasons. One of the common ways they use your social media profiles is to find out if you have pets. More specifically, underwriters want to know what type of pet you have. Most insurance companies use an unofficial ‘dangerous animal’ list which includes dogs notoriously prone to violence as well as pets out of the norm, like snakes and spiders. If you have a restricted pet, you could potentially be denied coverage.
Sharing TMI — that possibly leads to insurance claims
Home insurance companies aren’t just looking for information about your pets or a recent DIY remodel. They’re also looking for posts that could lead to a claim.
For example, if you disclose all the details about your upcoming vacation on Facebook, there’s a greater chance that someone could break into your home while you’re away.
If that happens and you file a theft claim, the insurance company might deny your claim because you tipped off the thieves.
“Criminals are becoming increasingly sophisticated in their information gathering, even using Google Earth and Streetview to plan their burglaries with military precision,” explains Black. “Insurance providers are starting to take this into account when they are assessing claims and we may in future see insurers declining claims if they believe the customer was negligent.”
If you have photos of yourself swimming with sharks, skydiving or bungee jumping, insurance companies will take note. Living a high-risk lifestyle ultimately means you’re more likely to get seriously injured or get involved in a fatal accident. Because of that, your insurance rate will probably skyrocket.
“We provide a couple unique insurance products and have used the Web and social media to find additional information on an individual, company or event,” says Adam Bates, VP of InsuranceForTrips.com.
Information about policyholders’ businesses
Commercial policies aren’t exempt either, which can require extensive underwriting given the many liabilities presented, and social media is great for that.
“I also use LinkedIn to help determine risk of different companies we insure. We provide accidental death & dismemberment insurance which covers losses from war and terrorism,” says Bates. “When a company inquires and wants a quote, I will use LinkedIn to discover the locations and possible activities in the high-risk or volatile countries the company is located in.”
Telecommuting and running businesses from home are becoming increasingly popular, and some homeowners insurance companies look for such scenarios when underwriting new homeowners policies or processing claims. For example, most home insurers either deny coverage or increase premiums drastically if high-risk businesses like daycare are operated out of private residences. A lot of traffic in and out of private residences – particularly when children are involved – increases liability risks, so if insurers discover your daycare business’ Facebook page shares your home address, expect denied or cancelled coverage, increased premiums, or even insurance fraud charges.
Photos that tell 1K words — about recent claims
Natalie Blanchard learned the hard way how a simple photo can affect health benefits. Car insurance claims and premiums are vulnerable too.
If you tell your auto insurer that you haven’t made any modifications to your vehicle, but you post a glowing review of the auto body shop that did your tinted windows and rims, a future claim could get denied.
Additionally, when something bad happens to your car or your house, your first reaction might be to snap a picture and post it to your feed. If you’re being honest with the insurance company, you have nothing to worry about. If the damage is ten times worse when the adjuster shows up, the original pictures could be used to deny your claim.
It can lead to more than denied claims – it can lead to criminal charges. In the court case, People V. Franco, the defendant lost her case thanks to a MySpace posting. She was involved in a car accident and was found at fault after the prosecution investigators found the following post:
“If you find me on the freeway and you can keep up, I have a really bad habit of racing random people.”
Life insurance and social media
Your social media profiles can be investigated when you’re applying for any type of insurance. However, it has the biggest impact when applying for life insurance. Your posts, comments, and pictures reveal a lot about your lifestyle.
For instance, if you’re clearly overweight in your profile picture, an insurance company can use that as evidence to raise your rate, because you are presumably at risk for obesity-related health issues.
If you post about an upcoming scuba diving adventure, the insurance company might assume you’re an adventure seeker who participates in other risky activities.
When it comes to life insurance, your health and lifestyle have a significant impact on your rate. A healthy person who enjoys reading and cooking will pay much less than a smoker person, or someone who lives for mountaineering.
Posting pictures of yourself and your adventures is generally harmless. But if you’re trying to get life insurance, know that those pictures could have a direct impact on the price of your premium.
- The things you post on social media can impact your ability to get insurance, and the cost of your premium.
- Social media can be used to verify details on your insurance application, such as marital status and age.
- Insurance companies can also look for evidence of health risks and risky behavior.
If you’re active on social media, keep in mind that insurance companies could be snooping for information. But that doesn’t mean you need to erase your online footprint when you start shopping for a new policy. It’s a good idea to review your profiles, do a quick sweep and delete any content that could jeopardize your ability to get coverage.